For many people trying their best to get into the real estate game, the idea of flipping houses might seem like a quick way to make some money. But is it all it’s made out to be? There are undoubtedly many naysayers who will try and talk you out of flipping houses and give you a long list of reasons as to why flipping houses is a bad idea. To a large extent, the naysayers can sometimes have some valid points. Flipping houses is by no means easy, and for first-time real estate investors, you can lose lots of your money on housing investments just as quick as you can earn profit. I want to discuss why flipping houses might be a bad idea if you don’t know what you’re doing.
Negatives Of Flipping Houses
High Start-Up Capital Required
I’ll start by addressing the very obvious elephant in the room, and that’s the amount of capital needed to initially get into flipping houses. The issue is not necessarily having the large sum of money to initially purchase a property, but rather the extra 10-20% capital required to refurbish the property. If you want to make money on a house, chances are you will need to add value to it in order to flip it for more money. This can of course be done very minimally, but for significant value, you will be required to invest some money into the property.
You Can Lose Money
We have all been there, myself included. Sometimes you might invest in a bad property when you’re trying to flip it, maybe it’s in the wrong area, or there are some unforeseen issues. You can very quickly lose a lot of your investment money if you make a bad buy, which could be detrimental to your bank account if you’re new to the game.
Flipping houses is a pretty bad idea if you value your free time. It takes up a lot of time, be it running around chasing contractors, sourcing materials, managing your finances as well as communicating with all the various people involved in the process of flipping a house successfully. If you have a young family or don’t have much spare time, many people will attempt to discourage you from flipping houses.
Overall, many people will say that flipping houses is a risky business and will warn you not to get in the game if you don’t want to take the risk of potentially losing out on money and potentially a house, furthermore you also run the risk of ruining relationships with those closest around you thanks to the copious amount of hours required to flip houses profitably.
Why I Don’t Listen to Other People
So, whilst there are many reasons people may say flipping houses is a bad idea, I choose not to listen to them. I make most of my money by successfully flipping houses, I even wrote a book about it. Whilst there are many negatives or reasons that may discourage you, there are multiple benefits to flipping houses as well.
You Can Learn How Real Estate Works
The biggest bonus to flipping houses is that you get to slowly learn how the world of real estate works. This can be increasingly beneficial to you as you progress in your house flipping and will enable you to make better decisions.
Flipping houses can earn you a pretty quick profit if you know what you’re doing. When I started out, I wished I had a resource like my YouTube channel which contains loads of information on how to flip houses for beginners and how to increase your profits.
Overall, flipping houses is a good idea if you’re willing to take the risk of potentially losing some capital. However, if you do the correct learning, and follow closely in my footsteps, you can earn a lot of money flipping houses when done correctly. Not only can you make lots of money, but you can also gain an invaluable insight into the world of real estate which will be extremely useful in any future property ventures.
Check out my YouTube channel for lots more helpful information on flipping houses.